London property prices give less value for money

I thought I’ll share this read, it’s very a interesting view!

Prime residential and commercial property in London, the financial capital of Europe, is up to six times more expensive than in other global centres, according to research from international real estate adviser Savills.

A 2,000-square-foot apartment in desirable areas of West London, including Kensington, Chelsea and Holland Park, sells for an average of £3.7m (€4m) at today’s near-peak prices. It would rent for an average of £8,670 a month, according to Savills.

In Paris, a similar-size apartment at a desirable address sells for £2m, and in Geneva it sells for £1.3m. In the Far East, Hong Kong is among the more expensive of financial centres for property, with 2,000-square-foot prime apartments selling for £2.6m and renting for £6,112 a month.

Dubai is the exception among the largest financial centres, where the same space averages £618,700 to buy and £2,730 a month to let, likely down on recent years following deterioration in the local property market.

London has also become more attractive to foreign buyers with the depreciation of sterling. The currency is down 25% against the US dollar over the past two years, and has lost 16% against the euro.

The cultural and educational offerings and the quality of the housing stock as reasons why London continues to command some of the highest rates for prime residential property. Similarly, commercial real estate also commands a premium in London over other financial centres.

A 2,000 square foot office costs on average £165,055 per annum to lease in London’s West End and £100,743 a year in the Square Mile.

The same office at Manhattan’s most desirable addresses lets for about £86,988 a year, while prime commercial space in Frankfurt lets for £70,631 a year and in Zurich for £79,182 a year.

While residential property in Dubai has taken a hit, commercial space, however, continues to command a premium. A 2,000-square-foot prime space lets for £126,394 a year in Dubai.

In Hong Kong, rents average £82,156 for 2,000-square-foot prime commercial space, but this could soon change, according to Liam Bailey, head of residential research at estate agent Knight Frank.

“London is more expensive for several reasons and will maintain its differential over other major cities, with the exception of high-growth Asia which is beginning to catch up.”

Tags: london, mayfair properties

Category: Property For Sale